Prosperity and sustainability

UBC’s David Boyd takes on dinosaur-in-chief Terence Corcoran on the nexus between environment and economy, and Canada’s lagging rankings:

Old ideas produce heat, not light

… The myth that nations must choose between economic prosperity and a healthy environment has been conclusively debunked.Countries including Sweden, Germany, Denmark and the Netherlands are similar to Canada with respect to per capita incomes, manufacturing intensity (industrial production as per cent of GDP), and road travel rates (kilometres per capita.) Yet these nations have far better environmental records, while maintaining a high standard of living.

The main difference is that these European nations recognize that one of the free market’s greatest flaws is the failure to put a price on pollution.

In response, they have implemented strong and effective environmental policies.

Europeans generate less air pollution in part because of more compact cities and superior public transit systems, but also because high fuel taxes and congestion charges compel them to drive more efficient cars and find alternatives to single passenger vehicles.

Innovative European laws require manufacturers of products ranging from computers to vehicles to eliminate the use of toxic substances and ensure their products can be recycled or remanufactured.

In contrast, Canada has been reluctant to use strong regulations or economic disincentives to protect the environment.

Instead of imposing a carbon tax on the oil and gas industry as Norway did, our governments provide billions of dollars in subsidies. Instead of imposing special charges on pesticides as European nations do, Canada exempts pesticides from the GST.

Overall, the level of environmental taxes in Canada is less than half that of EU nations with superior environmental records.

If strong environmental policies were a recipe for economic disaster, one would expect to find Northern European economies in disarray. Instead, the Scandinavian nations that are far ahead of Canada in environmental protection are also outperforming Canada economically.

In the World Economic Forum’s latest ranking of economic competitiveness, Canada fell to 16th place, while countries like Finland, Sweden, and Denmark placed in the top four.

It’s the 21st century economy, stupid. The nations that are outperforming Canada both economically and environmentally are strategically using public policies to spur innovation, investment, technological progress and behavioural change. …

David R. Boyd is a Trudeau Scholar at the University of British Columbia.